Rising prices leave food businesses in a pickle

Restaurants forced to jack up menu prices to factor in the soaring input costs, but fear incurring the wrath of patrons 

Surging transport and food commodity prices have forced Hyderabad restaurant owners into a corner even as they see patrons returning to their favourite haunts with a sharp reduction in COVID-19 cases.

“Prices of cooking oil have gone up by 125% and gas by over 100%. It has become a no-joy situation. Sometimes, I wonder why am I in this profession,” says chef Shankar Krishnamurthy, who heads the Hyderabad chapter of the National Restaurants Association of India. “We cannot keep increasing the prices [of the food]. We have to work with the menu, factor in all the ingredients and juggle with that to control costs,” adds Mr. Krishnamurthy, who pioneered fine dining with his Fusion 9 restaurant in the city.

The onset of summer has seen the price of vegetables and fruits shoot up. While the war in Ukraine is being cited for the hike in prices of cooking oil like sunflower and palmolein, the cost of groundnut and rice bran oil has also gone up due to higher demand.

According to industry sources, cooking oil prices have increased by 15-20% year on year. Dry chilli (single patti), which was trading at ₹10,300 per quintal last year, is now trading at ₹29,000 — an almost three-fold increase.

“Restaurants are not left with much choice, and are being forced to increase their menu prices to cope with this huge rise in commodity prices,” says Uttam Reddy of Rayalaseema Ruchulu. “Not only cooking oil, the cost of LPG cylinder, chicken, mutton, basic vegetables, basically everything has shot up. And it is steadily going up every single day. It is tough for any restaurant to survive without increasing the prices on menu,” he says, sharing his dilemma.

Orders on food delivery apps show a substantial change in prices over the past year as restaurants have increased the prices. Coupled with this, there are higher delivery charges to compensate delivery executives. The impact of the hike in commodities has even forced hole-in-the-wall curry points to increase prices.

“I used to sell half packet of curry for ₹20 and full packet for ₹40. Now that is difficult as the price of sunflower oil has gone up. Customers grumble but they are willing to pay ₹25 and ₹50 because of the quality,” says Ravi Ranjan Kumar, who runs a roti-and-curries outlet in Hyderguda area.